Nobody in Europe thinks any of my sports cars are large. I've driven them in Europe and they are roughly similar in size to most European cars. Some of them are even from European companies.
I really hate manufactures try to shove "small" cars down our European throats. Yes lots of people live in cities with medieval road architecture, but most of those people don't drive in the first place.
I'd wager around 70% of Europeans live in the surrounds of a big city and countryside so bigger cars would definitely sell. They started selling the Raptor here and it sells pretty good. Not sure who came up with the idea that European car needs = small econobox.
In fact there is a new chinese make that only sell SUVs and they are the #1 most sold here in Spain.
My daily vehicle is one of the only "city car" options ever sold in the US, it was originally made for the European market, and I love it. Most of my sports cars are only larger in length than the typical Euro econobox, but aren't considered particularly large. I see plenty of VW, Skoda, BMW, Mercedes, Renault, etc hatchbacks and sedans in Europe and have driven a few myself. I don't think "city car" has to be the only option in Europe, and I don't really see any evidence that there's an attempt to make it so. In some parts of Europe the fastest selling car is the Tesla Model 3. None of these are large vehicles by European standards, and definitely not by US standards.